fry  gf  (Lusois  imm 

THE  COST 

of 

COMPENSATION 

INSURANCE 

in 

VIRGINIA 


DESCRIBING  THE  VIRGINIA 
WORKMEN’S  COMPENSATION  ACT 

AND 

DISCUSSING  METHODS  WHICH 
PRODUCE  COMPENSATION 
INSURANCE  AT  COST 


Liberty  Mutual 

INSURANCE  COMPANY 

HOME  OFFICE,  BOSTON 


Copyright,  1918,  by 
ty  Mutual  Insurance  Company 
|  All  rights  reserved 


Virginia  Advisory  Board 

of 

Liberty  Mutual 

INSURANCE  COMPANY 

L.  B.  Conway 
Treasurer  Danville  Knitting  Mills 

Charles  G.  Craddock 
Director  Craddock-Terry  Company 

Robert  S.  Crump 
President  Standard  Paper  Mfg,  Co, 

Lawrence  H.  McWane 
President  Lynchburg  Foundry  Co, 

Milton  E.  Marcuse 

Vice-President  and  Treasurer  Bedford  Pulp 
£ff  Paper  Company 

William  J.  Parrish 

Secretary  and  General  Manager  Richmond  Cedar  Works 

William  T.  Reed 
President  Larus  &  Brothers  Co.}  Inc. 

William  S.  Royster 
Vice-President  F,  S,  Royster  Guano  Co, 


direct 


33/. 2.6" 

i_«/4'c. 


o 

The  Virginia  ^ 
Workmen’s  Compensation 
Act  in  Brief 


r*- 

The  Purpose  of  the  Workmen’s 
Compensation  Law 


THE  purpose  of  the  new  law  is 
to  establish  a  system  of  mak¬ 
ing  payments  to  injured  workmen, 
designed  to  benefit  both  the  em¬ 
ployer  and  employee. 


How  It  Benefits  the  Employer 

The  new  law  benefits  the  employer  in  several 
ways.  It  enables  him  to  compensate  his  em¬ 
ployees  injured  in  the  course  of  their  employ¬ 
ment  according  to  a  definite  scale ,  instead  of 
being  subjected  to  the  uncertain  liability  for 
damages  in  action  at  law  with  a  jury  trial,  and 
the  expenses,  annoyances  and  the  resultant  ill 
ts  feeling  between  employer  and  employee. 

It  enables  the  employer  to  have  his  injured 
workmen  compensated  without  delay  and  with- 
out  the  intervention  of  lawyers. 

01  3] 

as 

* 


It  serves  to  establish  a  more  friendly  feeling 
between  the  employer  and  employee  and  one 
based  on  business  principles. 

Under  this  form  of  insurance  the  approximate 
annual  cost  becomes  a  known  factor  and  can 
be  included  in  the  production  cost  to  be  later 
assumed  by  the  public  as  intended  by  the  law. 

How  It  Benefits  the  Employee 

It  provides  for  him  a  certain ,  speedy  and  in¬ 
expensive  means  of  securing  compensation  for 

injuries  resulting  in  disability  extending  beyond 
two  weeks,  instead  of  the  present  method  of 
uncertain,  slow  and  costly  redress;  and  pro¬ 
vides  him  with  medical  and  surgical  treatment 
for  a  period  of  thirty  days  —  these  benefits  all 
being  obtainable  without  recourse  to  the  law 
courts. 

The  Manner  of  Figuring  the  Amounts 
of  Compensation 

The  amounts  of  compensation  are  based  on 
the  standard  of  one-half  the  average  weekly 
wage  of  the  injured  employee  as  follows: 

1.  Total  Incapacity.  A  weekly  payment  beginning 
on  the  fifteenth  day  following  the  injury,  equal  to 
one-half  his  average  weekly  wages,  but  not  more 
than  $10.00  nor  less  than  $5.00  a  week  for  a  period 
of  not  more  than  500  weeks,  and  in  amount  not 
more  than  $4,000.00. 

2.  Partial  Incapacity.  A  weekly  payment  equal  to 
one-half  the  difference  between  his  average  weekly 

[4 


wages  before  the  injury  and  the  average  weekly  wages 
which  he  is  able  to  earn  thereafter,  but  not  more 
than  $10.00  a  week,  nor  for  a  longer  period  than  300 
weeks  from  date  of  injury. 

3.  Dismemberments .  In  case  of  injury  of  a  per¬ 
manent  character,  such  as  the  loss  of  a  hand  or  an 
eye,  compensation  is  payable  for  a  specified  number 
of  weeks  according  to  a  schedule  and  is  in  lieu  of  all 
other  compensation. 

4.  Death.  A  weekly  payment  to  the  dependents 
wholly  dependent  upon  the  earnings  of  the  deceased 
employee,  equal  to  one-half  his  average  weekly  wages, 
but  not  more  than  $10.00  nor  less  than  $5. 00  a  week 
for  a  period  of  300  weeks  from  date  of  injury,  and 
hurial  expenses  not  exceeding  $100.00.  If  the  em¬ 
ployee  leaves  dependents  only  partly  dependent  upon 
his  earnings  for  support,  the  weekly  compensation 
to  such  partial  dependents  shall  equal  the  same  pro¬ 
portion  of  the  weekly  payments  for  the  benefit  of 
persons  wholly  dependent  as  the  amount  contributed 
by  the  employee  to  such  partial  dependents  bears  to 
the  annual  earnings  of  the  deceased  at  the  time  of 
his  injury. 

5.  Medical  Treatment.  For  a  period  not  exceed¬ 
ing  thirty  days  after  the  injury,  the  employee  shall 
be  furnished,  free  of  charge,  such  necessary  medical 
attention  as  the  nature  of  the  accident  may  require. 


What  the  Law  Requires  of  Every 
Employer 

On  and  after  January  1,  1919,  every  em¬ 
ployer  and  employee  shall  be  presumed  to  have 
accepted  the  provisions  of  this  Act  and  shall 
be  bound  thereby  unless  he  shall  have  given 
notice  to  the  contrary  prior  to  any  accident 
resulting  in  injury  or  death. 

5] 


What  an  Employer  Must  Do  if  He 
Accepts  the  Act 


In  accepting  the  Act  an  employer  must  do 
one  of  four  things : 

1.  Insure  his  liability  for  compensation  benefits 
to  his  injured  employees  in  a  mutual  liability  com¬ 
pany,  which  pays  no  commissions  nor  profits  to  stock¬ 
holders. 

2.  Insure  with  a  stock  insurance  company,  which 
pays  commissions  to  brokers  and  dividends  to  stockholders 
in  addition  to  other  operating  expenses. 

3.  Furnish  to  the  Industrial  Commission  a  satis¬ 
factory  proof  of  his  financial  ability  to  pay,  direct, 
the  compensation  provided  for  in  the  Act. 

4.  Insure  in  a  State  Insurance  Fund.  (No  such 
fund  has  been  established  nor  money  appropriated 
for  it. ) 

When  the  Employer  Must  Give  Notice 
of  Acceptance 

The  employer  accepting  the  compensation 
provisions  of  the  Act  must  file  with  the  com¬ 
mission,  within  thirty  days  after  January  1,1919, 
evidence  of  his  compliance.  This,  however,  can 
be  cared  for  by  his  insurance  company. 


Consequences  of  an  Employer’s  Failure 
to  Accept  the  Provisions  of  the  Act 

Every  employee  who  is  injured  will  the7i 
have  the  right  to  bring  action  for  damages  and 

[6 


the  employer  is  deprived  of  the  privilege  of 
pleading  the  three  important  defenses  ; 

1.  That  the  employee  was  negligent. 

2.  That  the  injury  was  caused  by  the  negligence 
of  a  fellow  employee. 

3.  That  the  employee  had  assumed  the  risk  of 
the  injury, 

and  the  possible  award  by  the  jury  is  unlimited 
and  not  confined  to  the  amounts  of  compensa¬ 
tion  specified  in  the  Act. 

How  an  Employer  Is  Protected  by  His 
Compensation  Insurance 

When  an  employer  accepts  the  Act  his  em¬ 
ployees  automatically  waive  their  right  of  action 
at  common  law  to  recover  damages  for  personal 
injury,  unless  they  give  the  employer  written 
notice,  thirty  days  prior  to  any  accident,  that 
they  do  not  wish  to  come  within  the  Act.  If, 
however,  any  employee  who  has  given  such 
notice  is  injured  and  proceeds  against  the  em¬ 
ployer,  under  common  law  the  employer  is  still 
protected  by  his  insurance  policy. 

Where  the  Administration  of  the  Act 
Is  Vested 

A  Commission,  known  as  the  Industrial 
Commission  of  Virginia ,  has  recently  been  ap¬ 
pointed  by  the  Governor,  to  administer  the  Act. 
The  personnel  of  the  Commission  is  as  follows: 
7] 


Robert  H.  Tucker,  Lexington,  Va.,  to  represent 
the  people  at  large. 

Charles  A.  McHugh,  Roanoke,  Va.,  to  represent 
the  employers. 

Charles  G.  Kizer,  Norfolk,  Va.,  to  represent  the 
employees. 

The  salary  of  each  Commissioner  is  to  be 
$3,600.00  a  year  and  will  be  paid  by  the  Com¬ 
monwealth  of  Virginia. 

Disputes  as  to  the  Merits  of  Employees’ 
Claims  and  How  They  Will  Be  Settled 

There  will,  no  doubt,  be  disputes  because  of 
the  large  variety  of  accidents  and  the  individual 
attitude  towards  settlements.  Each  case  in  dis¬ 
pute,  however,  will  be  decided  by  the  Indus¬ 
trial  Commission,  upon  which  will  devolve  the 
duty  of  preventing  improper  settlements  and 
claims. 

The  Difference  between  the  Proposed 
Compensation  Insurance  and  the 
Present  Liability  Insurance 

At  the  present  time  an  Employer’s  Liability 
Policy  undertakes  to  indemnify  the  employer 
only  for  the  injuries  for  which  the  law  says  he 
is  to  blame.  Under  the  new  law  compensa¬ 
tion  is  paid  for  any  accident  regardless  of  blame, 
unless  the  employee  is  guilty  of  serious  and 
wilful  misconduct,  the  only  test  being,  did  the 
accident  arise  out  of  and  in  the  course  of  the 
employment  ? 


[8 


Just  What  Is  Meant  by  an  “  Employer” 

An  employer  is  defined  by  the  Act  to  be: 

Any  municipal  corporation  within  the  State 
or  any  political  division  thereof,  and  any  indi¬ 
vidual,  firm,  association  or  corporation,  or  the 
receiver  or  trustee  of  the  same,  or  the  legal 
representative  of  a  deceased  employer,  using 
the  service  of  another  for  pay. 

The  Exact  Definition  of  an  “  Employee  ” 

Every  person,  including  a  minor,  in  the  ser¬ 
vice  of  another  under  any  contract  of  hire  or 
apprenticeship,  written  or  implied,  except  one 
whose  employment  is  not  in  the  usual  course 
of  the  trade,  business,  occupation  or  profession 
of  the  employer. 

What  the  Phrase  “  Average  Weekly 
Wages  ”  Implies 

“Average  weekly  wage”  means  the  earn¬ 
ings  of  the  injured  employee,  in  the  employ¬ 
ment  in  which  he  was  working  at  the  time  of 
the  injury,  during  the  period  of  fifty-two  weeks 
immediately  preceding  the  date  of  the  injury, 
divided  by  fifty -two. 

“  Injury  ”  and  “  Personal  Injury  ”  under 
the  Act 

“  Injury  ”  and  “  personal  injury  ”  means 
only  injury  by  accident  arising  out  of  and  in 
9] 


the  course  of  the  employment  and  does  not 
include  a  disease  in  any  form,  except  where 
it  results  naturally  and  unavoidably  from  the 
accident. 


The  Law  as  to  Reporting  Accidents 

Within  ten  days  after  the  occurrence  and 
knowledge  thereof  a  report  of  an  injury  to  an 
employee  causing  his  absence  from  work  for 
more  than  seven  days  must  be  made  in  writing 
and  mailed  to  the  Industrial  Commission  on 
blanks  to  be  procured  from  the  Commission 
or  from  your  insurance  company. 


The  Greatest  Amount  Payable  in  Any 
One  Case 

The  greatest  amount  payable  in  any  one 
case  under  the  Act  is  four  thousand  dollars 
(14,000.00). 


How  the  Workman  Is  Protected  in 
Collecting  Compensation  for 
an  Injury 

No  claim  for  compensation  under  this  Act 
shall  be  assignable,  and  all  compensation  and 
claims  therefor  shall  be  exempt  from  all  claims 
of  creditors. 


[10 


When  the  Employee  Is  Injured  while 
Employed  Outside  of  Virginia 

If  the  accident  was  one  which  would  entitle 
the  employee  or  his  dependents  to  compensa¬ 
tion  if  it  had  happened  in  Virginia,  the  em¬ 
ployee  or  his  dependents  shall  be  entitled  to 
compensation,  provided  the  contract  of  em¬ 
ployment  was  made  in  Virginia,  the  employer’s 
place  of  business  is  in  Virginia,  and  the 
residence  of  the  employee  is  in  Virginia;  and 
provided  his  contract  of  employment  was  not 
expressly  for  service  exclusively  outside  of 
Virginia. 


How  an  Employer  Can  Obtain  More 
Detailed  Information  about  His 
Workmen’s  Compensation  as  well 
as  the  Approximate  Annual  Cost  of 
Compensation  Insurance  to  His 
Company 

By  reading  the  following  pages  and  com¬ 
municating  with  the  Liberty  Mutual  Insurance 
Company,  Mutual  Building,  Richmond,  Va., 
or  its  Home  Office,  at  185  Devonshire  Street, 
Boston,  Mass. 


u] 


[12 


A  Personal  Word 


I  REMEMBER  very  distinctly  some  of  my 
experiences  in  trying  to  interest  business 
friends  in  mutual  insurance  during  the 
early  days  of  the  Liberty  Mutual. 

I  found  that  in  every  case  they  had  gained 
their  ideas  about  insurance  from  stock  company 
agents.  Needless  to  say,  these  ideas  had  been 
somewhat  colored  in  favor  of  the  stock  insur¬ 
ance  companies  by  the  agents  to  whom  these 
companies  were  a  source  of  livelihood. 

Since  then,  however,  these  business  friends 
of  mine  have  come  to  understand  the  real  facts 
of  the  situation,  and  their  opinions  have  under¬ 
gone  a  radical  change.  They  are  now  among 
the  strongest  advocates  of  mutual  insurance. 

I  have  always  felt  that  if  business  men  could 
be  induced  to  make  even  a  brief  study  of  the 
basic  facts  of  the  insurance  business  they 
would  all  carry  their  insurance  in  mutual  com¬ 
panies.  The  case  is  so  obvious  when  you 
understand  the  facts. 

This  little  booklet  has  been  prepared  to  give 
the  basic  facts.  These  facts  are  reshaping  the 
buying  of  compensation  insurance  in  this  coun¬ 
try.  It  behooves  every  business  man  to  read 
them  with  an  eye  as  to  what  they  would  mean 
to  his  own  business  in  economy  and  service, 
year  after  year. 

WALTER  S.  BUCKLIN 

President 


13] 


Partial  list  of  large  industrial  concerns 
who  are  members  of  the  Liberty  Mutual: 

American  Pulley  Company 
American  Steel  &  Wire  Company 
Joseph  Bancroft  &  Sons  Company 
Berkshire  Cotton  Mfg.  Company 
Bird  &  Son 

Boston  Elevated  Ry.  Co. 

Boston  Post  Publishing  Company 
Chapman  Valve  Mfg.  Company 
Cluett,  Peabody  &  Company,  Inc. 

Crocker,  Burbank  Co.,  Inc. 

Curtis  Publishing  Company 
Dennison  Manufacturing  Company 
Everett  Mills 
Fels  &  Company 
General  Electric  Company 

Gilbert  &  Barker  Mfg.  Company 
Hubbard  &  Company 
International  Paper  Company 
Geo.  E.  Keith  Company 
Lawrence  Mfg.  Co. 

Fred  T.  Ley  &  Co.,  Inc. 

Marshall  Foundry  Co. 

New  Home  Sewing  Machine  Co. 
Niles-Bement-Pond  Co. 

Norton  Company 

Osgood  Bradley  Car  Company 
Pittsburgh-Des  Moines  Co. 

Thomas  G.  Plant  Company 
Public  Ledger  Company 
The  Pusey  &  Jones  Company 

Rice  &  Hutchins,  Inc. 

Simmons  Hardware  Company 
Standard  Pressed  Steel  Co. 

Stone  &  Webster  Eng.  Corp. 

Strathmore  Paper  Co. 

United  Drug  Company 
United  Shoe  Machinery  Company 
United  States  Envelope  Company 
United  States  Leather  Co.  of  Mass. 

Walworth  Mfg.  Co. 

Wyman-Gordon  Company 


[14 


THE  COST 

of 

COMPENSATION 

INSURANCE 


Force  of  Habit 

EVERY  business  man  knows  that  a 
dollar  saved  is  as  good  as  a  dollar 
earned.  Yet  even  the  shrewdest  business 
men  sometimes  overlook  the  most  obvi¬ 
ous  opportunities  to  effect  considerable 
savings  in  their  fixed  charges. 

In  buying  the  compensation  insurance 
required  by  the  law  which  goes  into  ef¬ 
fect  Jan.  1,  1919,  for  example,  many  a 
busy  executive  may  —  largely  through 
force  of  habit  —  pay  some  privately 
owned  stock  company  a  high  insurance 
premium,  because  he  is  persuaded  by 
15] 


his  insurance  broker  that  he  is  getting 
in  return  unusual  service  and  protection. 

But,  as  a  matter  of  fact,  while  he  may 
get  both  satisfactory  service  and  sufficient 
protection,  a  considerable  part  of  the 
high  premium  which  he  will  pay  is  not 
used  for  either  of  these  purposes.  It 
goes  to  pay  the  heavy  selling  costs  of  the 
stock  insurance  companies  and  the  divi¬ 
dends  which  they  must  pay  to  a  host  of 
stockholders. 

When  you  learn  how  simply  and  con¬ 
servatively  this  saving  can  be  made,  you 
will  understand  why  so  many  of  the  lead¬ 
ing  manufacturing  concerns  are  taking 
advantage  of  it. 


The  Thirty  Per  Cent 
Dividend 

THE  regular  dividend  to  policyhold¬ 
ers  of  the  Liberty  Mutual  Insur¬ 
ance  Company  is  and  has  been  thirty  per 
cent.  If  you  carry  your  insurance  in  a 

[16 


stock  company,  you  will  pay  a  commis¬ 
sion  of  seventeen  and  one-half  per  cent 
to  the  agent  or  broker  who  places  your 
insurance  —  although  your  state  laws 
make  it  practically  compulsory  for  you 
to  purchase  compensation  insurance.  In 
other  words,  you  will  pay  for  being 
solicited  to  buy  insurance  which  you 
must  buy  anyway. 

The  Liberty  Mutual  pays  no  commis¬ 
sions.  It  conducts  its  business  directly 
with  its  policyholders  through  salaried 
representatives. 

In  addition  to  the  agent’s  commission 
in  a  stock  company  a  portion  of  your 
premium  is  paid  to  the  shareholders  in 
the  form  of  dividends  on  their  stock. 

The  Liberty  Mutual  has  no  stock  and 
no  stockholders.  Every  dollar  of  your 
premium  that  is  not  spent  on  protection 
and  service  goes  back  to  you  in  mutual 
dividends  on  your  policy. 

The  modern  principle  of  cooperation 
in  business  is  the  keynote  of  mutual  in- 
17] 


surance.  In  the  Liberty  Mutual  every 
director  of  the  Company  is  a  policy¬ 
holder.  Every  policyholder  shares  di¬ 
rectly  in  the  earnings  and  is  interested 
in  eliminating  unnecessary  expense  and 
loss.  The  result  is  unusual  care  and  dis¬ 
crimination  in  the  acceptance  of  new 
risks  and  a  united  effort  to  reduce  acci¬ 
dents  to  a  minimum,  since  every  dollar 
saved  in  this  way  is  a  dollar  earned  for 
the  policyholders  of  the  Company. 

While  the  stock  companies  spend 
about  forty  per  cent  of  their  premiums 
for  expenses  of  selling  and  operating, 
the  Liberty  Mutual  spends  only  sixteen 
per  cent. 

The  Liberty  Mutual  has  returned  over 
$2,000,000  in  cash  dividends  to  its  pol¬ 
icyholders.  You  are  as  sure  of  getting 
the  regular  dividend  from  the  Liberty 
Mutual  as  you  are  of  getting  the  regular 
interest  on  a  deposit  in  a  mutual  savings 
bank. 


[18 


Fair  Treatment  of  Injured 
Employees 


WHILE  this  actual  saving  in  dollars 
and  cents  is  a  matter  of  the  great¬ 
est  importance  to  any  manufacturing 
concern,  every  business  executive  con¬ 
siders  of  equal  importance  the  service 
which  he  is  going  to  receive. 

“What  I  want  from  my  insurance 
company  is  service.”  Just  what  does 
this  familiar  expression  mean  ? 

It  means  for  one  thing  that  the  man 
who  has  a  large  number  of  people  in  his 
employ  wants  them  treated  considerately 
and  fairly  and  wants  them  paid  compen¬ 
sation  promptly  when  they  are  injured. 
It  means  that  when  a  valuable  man  is 
hurt  the  employer  does  not  want  him  to 
be  denied  compensation  because  some  in¬ 
surance  company’s  claim  agent  says  the 
injury  does  not  come  under  Clause  Y  of 
a  complex  insurance  policy.  In  other 
words,  when  his  employees  are  injured 
he  wants  them  treated  as  he  would  treat 

19] 


them  himself,  in  the  spirit  of  the  com¬ 
pensation  law. 

It  is  an  iron  clad  rule  of  the  Liberty 
Mutual  that  all  claims  of  injured  em¬ 
ployees  be  viewed  from  a  sympathetic 
standpoint  and  all  compensation  justly 
due  be  paid  without  delay  and  in  the 
spirit  intended  by  the  Act.  The  em¬ 
ployer’s  desire  for  friendly  relations  with 
employees  is  constantly  borne  in  mind 
and  everything  possible  is  done  to  con¬ 
serve  such  relations. 


Common  Sense  in  Factory 
Inspections 

FURTHERMORE,  while  every  em¬ 
ployer  of  labor  recognizes  that  some  of 
his  men  are  bound  to  get  hurt  no  matter 
how  fully  he  may  try  to  protect  them,  he 
wants  injuries  in  his  factory  reduced  to  a 
minimum.  He  wants  his  factory  known 
as  a  safe  place  to  work  in.  He  knows  that 
“labor  turnover”  is  expensive;  and  that 
the  foremost  industrial  concerns  of  the 

[20 


country  are  giving  a  great  deal  of  atten¬ 
tion  to  safety  devices  and  safety  education 
because  it  pays  in  dollars  and  cents  saved 
in  production  cost.  For  all  these  reasons 
the  head  of  a  busy  factory  wants  a  reason¬ 
able  number  of  expert  inspections  for  the 
prevention  of  injuries. 

But  he  wants  inspections  of  his  plant 
made  in  his  own  way  and  at  his  own 
convenience.  He  wants  them  made  by 
experienced  safety  engineers  who  have 
been  trained  to  look  at  safety  suggestions 
from  the  viewpoint  of  the  manufacturer, 
not  merely  that  of  the  insurance  com¬ 
pany.  He  wants  the  engineer  to  con¬ 
sider  the  effect  of  his  recommendations 
from  a  practical  operating  viewpoint 
and  to  keep  the  cost  of  improvements 
within  reasonable  limits.  He  also  wants 
these  recommendations  submitted  for 
his  consideration  in  the  form  of  fully 
written  reports.  This  is  the  type  of  in¬ 
surance  service  that  enables  the  manu¬ 
facturer  to  scale  down  his  insurance 
rate  with  the  least  outlay  of  time  and 
worry. 

21] 


The  Liberty  Mutual  is  especially 
equipped  to  render  just  this  sort  of  ser¬ 
vice.  The  best  proof  that  it  is  doing  so 
is  the  list  of  concerns  which  place  their 
insurance  with  it  year  after  year.* 


The  Strength  of  Mutual 
Insurance 


HERE  can  be  no  stronger  evidence 


A  of  the  fundamental  soundness  of 
mutual  insurance  than  the  rapid  develop¬ 
ment  of  the  mutual  idea  in  this  country 
during  the  past  few  years.  The  great 
Metropolitan  Life  with  over  seven  hun¬ 
dred  millions  in  assets,  and  the  Prudential 
Life  with  over  four  hundred  and  seventy- 
five  millions,  were  mutualized  in  1915. 
Then  followed  the  mutualization  of  the 
Equitable  Life.  The  New  York  Life, 
the  John  Hancock  and  the  New  England 
are  all  mutuals.  In  fact  ninety  per  cent 
of  all  life  insurance  is  conducted  upon  the 
mutual  plan. 


*See  page  14. 


[22 


The  “Factory  Mutuals”  of  New 
England,  the  first  organizations  in  the 
United  States  to  insure  manufacturers  ex¬ 
clusively  against  fire  losses,  are  to-day  the 
best  example  of  fire  insurance  in  this  coun¬ 
try.  Seventy-five  per  cent  of  the  factories 
east  of  the  Mississippi  having  standard 
fire  protection  carry  their  fire  insurance 
in  these  and  other  mutual  companies. 

In  a  recent  address,  the  Insurance 
Commissioner  of  Massachusetts,  referring 
to  the  annual  amount  of  compensation 
premiums  written  in  that  state,  illustrated 
the  rapid  growth  of  mutual  insurance  and 
the  decline  of  stock  insurance  in  a  most 
impressive  way.  During  the  five  years 
ending  1916,  the  business  of  over  twenty 
stock  companies  decreased  13.37  per  cent, 
while  the  business  of  the  four  mutual 
companies  increased  32.33  per  cent,  as 
shown  by  the  following  figures  quoted 
from  his  address: 

_  ,  1912  1913  1914  1915  1916 

Stock 

Companies  70.74  71.29  68.91  67.04  61.28 

Mutual 

Companies  29.26  28.71  31.09  32.96  38.72 

23] 


In  making  the  address,  from  which 
these  figures  are  taken,  the  Insurance 
Commissioner  said:  “These  figures  tell 
their  own  story  whether  we  like  it  or 
not;  whether  we  are  mutual  advocates 
or  stock  advocates,  or  neither.” 

Mutual  insurance  is  cooperative  insur¬ 
ance.  It  is  controlled  by  the  men  whom 
it  protects,  and  is  managed  by  experts 
whom  they  employ.  The  idea  is  as  old 
as  insurance  itself  and  was  in  fact  the  only 
type  of  insurance  known  to  business,  un¬ 
til  some  man  evolved  the  idea  of  exploit¬ 
ing  the  need  for  protection  to  his  own 
profit  through  the  stock  company.  It  is 
because  the  mutual  companies  are  oper¬ 
ated  only  for  the  interest  of  the  policy¬ 
holders  that  there  are  no  commissions 
paid  to  insurance  agents,  nor  dividends 
to  stockholders  as  in  the  privately  owned 
insurance  companies. 

Mutual  insurance  is  based  on  exactly 
the  same  principle  as  the  savings  bank, 
and  your  insurance  is  as  safe  in  the  Lib¬ 
erty  Mutual  as  your  deposit  is  in  a  strong 
savings  bank. 


[24 


Cooperative  management,  economical 
administration  and  complete  protection  — 
are  the  cardinal  principles  of  mutual  in¬ 
surance. 


The  Liberty  Mutual 
Company 

HE  Liberty  Mutual  —  originally 


X  called  the  Massachusetts  Employees 
Insurance  Association  —  was  created  in 
1912  as  part  of  the  Massachusetts  Work¬ 
men’s  Compensation  Act,  in  order  that 
employers  should  have  a  company,  man¬ 
aged  by  their  own  representatives,  in 
which  they  could  obtain  insurance  at 
cost. 

Its  first  board  of  directors  was  appointed 
by  the  Governor  of  Massachusetts,  but 
on  July  1,  1912,  the  Company  was  turned 
over  by  the  State  to  the  policyholders. 

The  Company  is  purely  cooperative 
and  mutual,  and  is  controlled  by  em¬ 
ployers  and  business  men  who  are  its 
policyholders.  Its  directors  are  all  busi¬ 
ness  men  like  yourself.* 


*See  page  30  for  list  of  directors  and  their  affiliations. 
25] 


Strong 

Reinsurance  Protection 


HE  Liberty  Mutual  furnishes  its 


X  policyholders  the  protection  of  its 
own  financial  resources,  aggregating 
over  three  million  dollars.  Its  liabilities 
include  reserves  of  over  two  and  one-half 
million  dollars  and  it  has  a  surplus  of 
over  six  hundred  thousand  dollars.  In 
addition  to  this,  the  Company  furnishes 
its  policyholders  the  protection  of  reinsur¬ 
ance  against  unusually  large  losses.  This 
is  carried  in  one  of  the  strongest  insur¬ 
ance  institutions  in  the  world  —  Lloyds 
of  London. 

The  resources  of  the  Liberty  Mutual 
plus  reinsurance  in  Lloyds  of  London 
afford  substantial  assurance  to  policy¬ 
holders  of  the  adequacy  of  the  insurance 
protection  and  the  continuance  of  the 
annual  dividends  of  thirty  per  cent  from 
year  to  year. 

It  may  be  conservatively  stated  that 
there  is  no  company  that  affords  better 

[26 


security  to  its  policyholders  than  the 
Liberty  Mutual,  and  there  are  few  com¬ 
panies  which  furnish  equal  security. 

Your  Own  Insurance  Cost 

ABOR  is  a  big  item  of  your  expense. 


-1— *  The  cost  of  its  protection  is  com¬ 
paratively  high.  To  pay  more  than  the 
actual  cost  of  that  protection  is  like  hav¬ 
ing  an  unnecessary  tax  imposed  on  your 
plant  —  a  condition  you  would  naturally 
resent. 

The  opportunity,  therefore,  to  secure 
compensation  insurance  at  almost  one- 
•  third  less  cost  —  thirty  cents  less  out  of 
every  dollar  —  year  after  year,  should  be 
a  matter  of  satisfaction  to  you  as  an  em¬ 
ployer. 

What  is  more,  together  with  this  sav¬ 
ing  you  obtain  an  expert  inspection  ser¬ 
vice  for  your  factory  through  our  safety 
engineering  department  which  may  still 
further  reduce  your  premium. 


27] 


4 


And  now  that  you  have  read  the  brief 
statement  of  Liberty  Mutual  Insur¬ 
ance  given  in  these  pages,  do  you  not 
believe  that  it  is  worth  your  while  to  look 
into  the  question  a  little  further? 

May  we  suggest  that  you  write  or  tele¬ 
phone  to  our  Richmond  Office,  602 
Mutual  Building,  for  the  purpose  of 
allowing  us  to  quote  you  rates  for  work¬ 
men’s  compensation  and  liability  insur¬ 
ance.  All  the  information  you  will  need 
to  furnish  us  is  the  nature  of  your  busi¬ 
ness  and  an  estimate  of  your  annual  pay¬ 
roll.  Such  action  may  mean  the  saving 
of  many  dollars  to  you  in  your  annual 
insurance  cost. 


Liberty  Mutual 

INSURANCE  COMPANY 


[28 


Financial  Statement  of  the 

LIBERTY  MUTUAL 

Insurance  Company 


ASSETS 

Sept.  30 

Dec.  31 

1918 

1917 

Railroad  and  other  bonds  . 

.  $2,547,952.91 

$1,400,525.00 

Interest  due  and  accrued 

34,799.62 

19,132.01 

Cash  on  hand  and  in  bank  . 

475,958.39 

1,057,404.33 

Premium  notes  . 

34,986.03 

241.64 

Premiums  in  course  of  collection  207,558.56 

246,390.75 

Accounts  receivable  . 

9,074.12 

8,523.07 

Total  Assets 

.  $3,310,329.63 

$2,732,216.80 

LIABILITIES 

Reserve 

For  losses 

.  $1,641,302.33 

$1,041,731.23 

For  unearned  premiums  . 

914,378.87 

970,052.49 

v  For  all  other  liabilities 

119,048.11 

191,582.03 

Surplus  to  policyholders 

635,600.32 

528,851.05 

Total  Liabilities  . 

.  $3,310,329.63 

$2,732,216.80 

RECORD 

OF  PROGRESS 

RESOURCES 

NET  PREMIUMS 

SURPLUS 

1912  $563,174.90 

$619,256.97 

$126,765.63 

1913  853,407.11 

706,627.83 

256,612.38 

1914  1,052,669.26 

817,569.41 

358,822.33 

1915  1,320,253.35 

903,336.57 

384,539.87 

1916  1,814,423.40 

1,337,308.64 

425,651.12 

1917  2,732,216.80 

2,434,027.37 

528,851.05 

29] 

* 


Board  of  Directors 

Charles  L.  Allen,  Treasurer  Norton  Company 
Walter  S.  Bucklin,  President 

Francis  W.  Davis,  General  Manager  Pilgrim  Laundry  Co . 
W illiam  O.  Day,  Treasurer  United  States  Envelope  Co, 
Wallace  B.  Donham,  Vice-President  Old  Colony  Trust  Co. 
Walter  C.  Fish,  Manager  Lynn  W irks ,  General  Electric  Co. 
John  R.  Freeman,  President  Manufacturers  Mutual  Fire 
Insurance  Co. 

Joseph  P.  Gray,  President  Boston  Manufacturers  Mutual 
Fire  Insurance  Co. 

John  Gribbel,  Vice-President  Curtis  Publishing  Co. 

George  E.  Hall,  Vice-President  and  General  Manager 
Boston  IVoven  Hose  and  Rubber  Co. 

Henry  Howard,  Vice-President  Merrimac  Chemical  Co. 
Moses  B.  Kaven,  United  Shoe  Machinery  Co. 

Eldon  B.  Keith,  Treasurer  George  E.  Keith  Co. 

John  S.  Kent,  Treasurer  M.  A.  Packard  Co. 

Harold  A.  Ley,  President  Fred  T.  Ley  &  Co.,  Int . 

Louis  K.  Liggett,  President  United  Drug  Co. 

Clinton  S.  Marshall,  Manager  Worcester  District  Ameri¬ 
can  Steel  &  Wire  Co. 

Frederick  C.  McDuffie,  Treasurer  Everett  Mills 
William  J.  McGaffee,  President  Thomas  G.  Plant  Co. 
James  S.  Murphy,  President  Stickney  £sf  Poor  Spice  Co. 
Charles  T.  Plunkett,  President  Berkshire  Cotton  Mjg.  Co. 
Harry  L.  Rice,  President  Rice  fsf  Hutchins,  Inc. 

David  A.  Russell,  General  Manager  Windsor  Print  Works 
Russell  A.  Sears,  General  A ttorney  Boston  Elevated  Ry.  Co. 
James  W.  Spence,  President  Rockland  Trust  Co. 

Malcolm  B.  Stone,  Treasurer  Ludlow  Mfg.  Associates 
Patrick  F.  Sullivan,  President  Bay  State  Street  Railway  Co. 
Eugene  V.  R.  Thayer,  President  Chase  National  Bank 
George  F.  Willett,  Willett,  Sears  £sf  Co. 


[30 


Pennsylvania  Advisory  Board 


1 

I 

Charles  E.  Brinley  Vice-President  American  Pulley  Co. 
Powell  Evans  .  President  Merchant  and  Evans  Co. 

John  Gribbel . John  J.  Griffin  iff  Co. 

Charles  H.  Ludington  Treasurer  Curtis  Publishing  Co. 
Godfrey  R.  Rebmann  .  Vice-President  Otis  Elevator  Co. 
Edward  A.  Schmidt 

President  C.  Schmidt  iff  Sons  Brewing  Co. 
Maurice  N.  Weyl  Treasurer  Edward  Stern  if f  Co.y  Inc. 
John  C.  Winston  .  President  The  John  C.  Winston  Co. 
John  E.  Zimmermann  .  .  .  Day  iff  Z immermann 


t  Delaware  Advisory  Board 

W.  C.  Corey  .  .  President  Delaware  Leather  Company 

G.  L.  Coppage  .  .  The  Pusey  and  Jones  Company 

Joseph  Bancroft 

Vice-President  Joseph  Bancroft  iff  Sons  Company 
Claude  Sutton  President  American  Vulcanized  Fibre  Co. 
Joseph  S.  Hamilton,  President  Joseph  S.  Hamilton  Company 
J.  J.  Satterthwait,  President  Remington  Machine  Company 
C.  D.  Garretson 

Secretary-Treasurer  Electric  Hose  iff  Rubber  Co. 


31] 


I 


UNIVERSITY  OF  ILLINOIS-URBANA 


3  0112  062063893 
Officers 


Walter  S.  Bucklin 
Henry  Howard  . 
Charles  T.  Conway 
Clark  E.  Woodward 
S.  Bruce  Black 
Lewis  F.  Tuells  . 
Charles  R.  Wilder 
Joseph  W.  Church 


Safety  Eng 

David  S.  Beyer 
George  H.  Bigelow 


Presiden 
Board  Vice-Presiden 
.  .  Vice-Presiden 

Secreta ; 

.  Treasurer 
Underwriting  Manager \ 
Asst,  to  Presiden , 
.  Asst.  Secreta\ 


neering  Department 

Vice-President  and  Chief  Engineer 
Asst.  Chief  Engineet\ 

Compensation  Department 

John  W.  Cronin . General  Attorned 

William  A.  Brooks,  M.D.  .  .  Medical  Directoi\ 

Home  Office 

185  Devonshire  Street,  Boston,  Mass. 

Branch  Offices 

New  York  City  —  30  East  Forty-Second  Street 
Philadelphia  —  20  South  Fifteenth  Street 
Pittsburgh  —  First  National  Bank  Building 
Springfield,  Mass.  — Stearns  Building,  293  Bridge  Street;] 
Worcester,  Mass. — Park  Building,  507  Main  Street 
Providence,  R.  I.  — 912  Turks  Head  Building 
Portland,  Me.  —  702  Fidelity  Building 
Wilmington,  Del.  — Tenth  and  King  Streets 
Richmond,  Va.  —602  Mutual  Building 


[3 


